Former Kluge estate sells for $39 million

Darrell Hofheinz @PBDN_hofheinz

Saturday

Sep 3, 2016 at 12:01 AMSep 3, 2016 at 6:29 PM

The winter compound of the late billionaire John W. Kluge has sold for a recorded $39 million. The 4-acre property at 89 Middle Road in the Estate Section had been on the market nearly five years and was priced at $59 million by the seller, Columbia University.

Seasonal Palm Beacher Peter Wood, a British developer building a house for himself nearby, is on the buyer’s side of the deal and bought the property through a limited liability company named after the property’s address, according to statement released on his behalf today. The limited liability company is a U.S. affiliate of W-ONE International Group, a company he owns.

> PHOTOS: Former Kluge estate

Brown Harris Stevens agent John O. Pickett III acted on Wood’s behalf in the sale. The purchase brings the total amount of Estate Section property under Wood’s auspices to 6.1 acres, thanks to a purchase totaling about$43 milion nearly two years ago for another large estate nearby.

With 150 feet of oceanfront and 4.3 acres, the former Kluge estate has plenty of room for redevelopment, even with two vintage houses and three major outbuildings. The property includes a landmarked oceanfront house designed by noted society architect Addison Mizner as well as a larger house by architect Marion Sims Wyeth on the west side. A few blocks south of Worth Avenue, the irregularly shaped estate stretches between the ocean and South County Road.

Kluge (pronounced KLOO-gee) bequeathed the estate to Columbia, his alma mater, in early 2008, nearly three years before his death at 95 in September 2010. After listing the property for sale in May 2011, the university never lowered the price. It also never broke the unity of title that would have subdivided the property into multiple parcels. Doing so might have made it easier to sell, according to local real estate observers.

The estate had been jointly marketed by listing agents Carol Digges and Carole Hogan of Brown Harris Stevens and Paulette Koch and Dana Koch of the Corcoran Group.

‘Only one John Kluge’

Dana Koch said he couldn’t discuss why the asking price had never wavered. But he did say the one-of-a-kind property, with its older houses, was a hard-sell for many of today’s buyers.

"The estate was one of the last great parcels left in Palm Beach, and it is in a great location," he said. "But when people are looking for large parcels or large homes, they are often looking for something newly renovated or new construction," Koch said.

Known as La Casa Sin Nombre ("The House with No Name"), the estate comprises several adjacent parcels that Kluge assembled in the early-to-mid-1990s on Middle Road and El Bravo Way. Kluge had the grounds designed with broad lawns accented by fountains, statues and gardens.

Hogan said the estate offered a key lesson: "There was only one John Kluge," she said, decribing the late billionaire as a "one-in-a-million buyer for that property."

She added: "He compiled it the way he wanted. He was more interested in the garden than the ocean. And today’s buyers are more interested in the ocean than the garden."

Ripe for redevelopment

Wood already has experience buying an estate ripe for redevelopment in the Estate Section. In May 2014, a U.S. company affiliated with him and British homebuilder Royalton Group paid billionaire Jon Stryker $42.9 million for his nearby estate at 61 Middle Road. Measuring 2.6 acres, it was already subdivided into three parcels. Wood is building himself a new home on part of the property at 101 Via Marina on a parcel once owned by singer Jimmy Buffet. Meanwhile, plans were drawn up for a house that might be developed next door on a vacant lot at 530 S. Ocean Blvd. The third parcel — with a landmarked house at 61 Middle Road — wasresold for $11.73 million a few months after the deal with Stryker.

When the Stryker deal was finalized, Wood had recently become a partner in Royalton Group.

Pickett said the future of the property is still being decided.

"It is my understanding and belief that the plan would be to divide it into more manageable lot sizes — but I don’t think the decision has been made as to what the next step might be," Pickett said, adding that any subdivision would have to meet town requirements.

"Mr. Wood is considering all his options," Pickett said.

Wood has owned a 1920s-era home at 113 Clarke Ave. since 2007, property records show. He made his money in insurance, founding several British companies, including Direct Line and, more recently, esure. He also has founded insurance companies in the United States and Spain.

Wood was advised in the Middle Road sale by Gregory E. Young of the global law firm Squire Patton Boggs, according to his statement.

‘Quite substantial’

In accordance with Kluge’s wishes, proceeds from the sale were earmarked to benefit student scholarships at Columbia, according to a previous statement released by the two Palm Beach real estate agencies that co-listed the property.

The buildings offer 20,852 square feet of living space inside and out. The estate includes landmarked Audita, a 5,541-square-foot oceanfront house designed in 1921 by Mizner and subsequently renovated by Wyeth. Mizner designed the Mediterranean-style house for Standard Oil heiress Elizabeth Kay and her husband, Alfred.

The largest house on the property was designed by Wyeth in 1935 and later expanded. Measuring 12,712 square feet, it was used as a winter residence by Kluge, who had ties to Charlottesville, Va., and his widow, Maria Tussi Kuttner.

The three outbuildings are suitable to accommodate household staff or houseguests, according to the sales listing.

Cul-de-sac created

The estate’s front entrance is accessed from a cul-de-sac on Middle Road, which was created after Kluge got the town to "abandon" the southernmost part of the street in 1995. He paid $237,000 for his portion of road, which had nearly bisected the property. In all, Kluge reportedly spent $16.5 million assembling four properties for the estate, knocking down two houses in the process.

When he bought the road, Kluge was identified as the third richest man in the country. His fortune came from a communications empire that included founding and serving as CEO of Metromedia, an independent broadcaster. He sold off its television and radio stations, diversifying into cellular telephone licenses, film rights, restaurants, radio stations, the New York Red Bulls soccer team, the Harlem Globetrotters and the Ice Capades. In addition to Columbia, his philanthropic support included the Library of Congress and the University of Virginia.

Estates of the size of the Kluge property are rare in Palm Beach’s market. The last time the Estate Section saw a sale even approaching the acreage of the Kluge estate was the Stryker sale. In that deal, Corcoran’s Team Koch had the listing and acted opposite Pickett, then of Barrett Welles Property Group, which is today part of Brown Harris Stevens. Pickett again represented Wood’s interestsin the subsequent re-sale of 61 Middle Road, opposite Brown Harris Stevens agent Ben Stein, who represented buyers Laetitia and Dr. Ben Han.